EUR/USD Price Forecast: Waiting for the Federal Reserve

EUR/USD Current price: 1.1360

• The United States Federal Reserve will announce its decision on monetary policy.
• US and China will start discussions about a de-escalation of trade tensions.
• EUR/USD is technically neutral, risk remains skewed to the upside.

The EUR/USD pair trades uneventfully for a fourth consecutive day, as market players await the United States (US) Federal Reserve (Fed) monetary policy announcement.

The US Dollar (USD) found near-term support on headlines suggesting easing tensions between China and the US. Top White House trade officials will meet their Chinese counterparts in the upcoming days to discuss a de-escalation of the trade war that led to three-figure levies between the world’s two largest economies.

So far, the macroeconomic calendar included German Factory Orders, which rose in March by 3.6%, much better than the 1.3% anticipated. The Eurozone (EU) reported Retail Sales for the same month, which were down by 0.1%, worse than the 0% forecast.

The US will not release relevant figures, focusing on the Fed. Investors expect the central bank to keep interest rates steady, with the benchmark borrowing interest rate seen floating between 4.25% and 4.5%. Fed officials have expressed uncertainty about the impact of President Trump’s tariffs on inflation and economic growth, adopting a wait-and-see stance.

Trump demanded lower rates and accused Chairman Jerome Powell of being too late and a loser, and even threatened to fire him. Things escalated to the point of putting into doubt the Fed’s independence, although Trump finally said he won’t do so and claimed he was just “frustrated” with high interest rates.

Today’s announcement is already priced in, shifting the focus to Powell’s speech and any update on policymakers' perspectives. Additionally, questions regarding Powell’s relationship with Trump are to be expected.

EUR/USD short-term technical outlook

The daily chart for the EUR/USD pair shows it trades at the upper end of its recent range around 1.1360, with a neutral-to-bullish stance. The pair keeps hovering around a bullish 20 Simple Moving Average (SMA), which develops far above mildly bullish 100 and 200 SMAs. At the same time, the Momentum indicator remains stuck around its 100 line, while the Relative Strength Index (RSI) indicator heads nowhere at around 59, in line, all of which reflects the absence of directional strength.

In the near-term and according to the 4-hour chart, the EUR/USD pair remains trapped between a flat 100 SMA providing resistance at around 1.1370, while an also directionless 20 SMA remains below the current level. Finally, technical indicators head nowhere, barely above their midlines.

Support levels: 1.1275 1.1230 1.1190

Resistance levels: 1.1370 1.1410 1.1465